Before last night, polls, betting odds, talking heads, prediction experts, and your Aunt Mabel all agreed Biden would be the next president.  Financial markets were leaning that direction too (with higher bond yields).  While Biden could certainly still win, a likely victory has turned into a nail-biter.  Moreover, the Senate is unlikely to flip (which was an even bigger risk for bonds).  As such, the only confirmed maritime metaphor for today is the green wave in bonds.

20201104 open1.png

Biggest candlestick since March, as expected:

20201104 open3.png

Uptrend still intact, but bond bulls are knocking on the floor:

20201104 open2.png

Today's key event is quite simply election watching.  Michigan is in focus.  It's the tightest race, and assuming Biden has NV, AZ, and WI, Michigan makes 270 electoral votes.  It's not clear what the bond market's reaction function would be at the moment, but the absence of a clear democratic flip of the Senate is probably helping.  Also, we could simply have traders coming back into the market after having gone to the sidelines late last week.  Either way,  blue wave + red wave = green wave for bonds.


MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
UMBS 2.0
103-16 : +0-16
Treasuries
10 YR
0.7696 : -0.1114
Pricing as of 11/4/20 9:13AMEST